Post-9/11 incident the Taliban rule ended in Afghanistan and a democratic government was established through the Bonn conference in December 2001. The conference was held with the active intervention of the US and the UN, which distributed the power amongst different ethnic groups of the country, followed by the promulgation of a democratic constitution in 2004 by the “Loya Jirga” in Kabul. The new constitution proclaimed Afghanistan as a sovereign, Islamic Republic-where the state’s legitimacy would be achieved through a universal adult franchise, and the state would ensure the fundamental rights of the citizens. But, despite all these efforts, democracy could not consolidate in the country, consequently, the Taliban returned to power after 20 years of war. Does the paper explain what led to the failure of democracy in Afghanistan? And what type of government can best suit Afghan society? The paper finds out that establishing western style strong centralized democracy and power sharing on an ethnic basis in the Bonn conference led to the marginalization of religious and tribal authwhichty, who used to enjoy leverage in provinces. Also, the centralization of power resulted in corrupting government officials, which led to a widening gap between the state and society, and weakened the government institutions. As a result, the Taliban after a peace agreement with US on 29th February 2020, captured power in Kabul on 15th August 2021. The paper finds out that formulating a decentralized authority, with a mixed type of sovereignty, and aligning democratic principles with religious and tribal authority is the most feasible form of government for Afghanistan. According to Islamic scholars, there is compatibility between Islam and democracy, because Islam believes in consultation and Bay’a in state formation, and these tenets of Islam are similar to the core values of democracy namely representation, freedom of expression and election. Keywords: Islam, Democracy, Jirga, Consultation, Bay’a, Bonn conference, corruption, Human Rights violation